Panama Canal disruptions are worsening. Wait times for vessels without reservations have surged this month.
In response to drought conditions, the Panama Canal Authority (ACP) cut the variety of day by day reservation slots from 32 initially of November to 24 currently. Slots will drop to 22 on Friday, then to 18 by Feb. 1.
If enough ships don’t divert from the Panama Canal to offset the drop in reservation slots, the variety of ships without reservations rises — as does wait time.
The common wait time for ships with out a reservation for Atlantic-to-Pacific (southbound) transits was 2.1 days initially of November. As of Wednesday, it was over five times that — 11.4 days — in accordance with ACP data.
The utmost wait on for southbound transits hit 22.8 days on Sunday, triple the utmost wait initially of the month.
Pacific-to-Atlantic (northbound) transits also show a pointy rise in wait time in November for ships without reservations, coinciding with cuts to reservation slots.
Average wait time was nine days on Wednesday, greater than triple the common initially of the month. The utmost wait time was 24.9 days on Wednesday, greater than quadruple what it was in early November.
Panamaxes waiting the longest
The ships suffering the longest wait times are those transiting the older Panamax locks, which the ACP categorizes as “regulars,” ships with a beam (maximum width) of lower than 91 feet, and “supers,” those with a beam of 91 to 107 feet.
As of Wednesday, no Neopanamax ships (with beams over 107 feet) within the queue had been waiting greater than 11 days to transit the larger, newer locks. In contrast, on the Panamax locks, 10 supers had been waiting 13-25 days and three regulars for 14-15 days.
In response to rising wait times, the ACP just began offering a special day by day auction slot for Panamax locks transits to supers and regulars without reservations which have been waiting 10 days or more. The primary slot within the special auction was for a transit on Monday.
Average wait time for Neopanamaxes also up
Data on average (versus maximum) wait times shows that Neopanamaxes without reservations are likewise facing longer waits this month — this shouldn’t be an issue specific to the smaller Panamax locks.
On the southbound route — commonly utilized by ships transporting bulk commodity cargoes from the U.S. to Asia and the west coast of South America — average wait time for Neopanamaxes without reservations was higher than for Panamaxes throughout the first half of November and on par with the common for all ship sizes on Tuesday.
Average wait time for southbound Neopanamaxes that don’t have any reservation is triple what it was initially of November.
On the northbound route — ceaselessly utilized by laden container ships headed to U.S. ports and empty bulkers and tankers planning to reload within the U.S. — average wait time for Neopanamaxes without reservations was according to Panamax wait time for many of this month.
Average Neopanamax wait time has now fallen well below Panamax levels within the northbound lane. Nonetheless, this has only been throughout the past 4 days.
Impact on bulk commodity shipping
Ship-position data from MarineTraffic showed 33 dry bulk carriers at anchorage off entrances to the canal on Wednesday (18 on the Pacific side, 15 on the Atlantic side).
The queue of product tankers was heavily weighted to the Pacific side: 16 versus three on the Atlantic side. As well as, there have been a dozen liquefied petroleum gas (LPG) tankers waiting, six at either entrance. There was just one liquefied natural gas (LNG) carrier waiting to transit.
The commodity ship backlog could be larger, except that many LNG carriers, in addition to high-capacity LPG tankers often called very large gas carriers (VLGCs), have already given up on Panama.
“For individuals who wish to go from the Atlantic Basin to the Pacific Basin [with LNG ships], they’re going across the Cape of Good Hope as Plan A. I’d go to date as to say that’s the norm now,” said Richard Tyrrell, CEO of LNG carrier owner Cool Co. (NYSE: CLCO), during a conference call Tuesday.
VLGCs are actually commonly avoiding Panama on their return trip to the U.S. from Asia. “The variety of VLGCs taking longer routes to the U.S. from Asia has skyrocketed,” said Oystein Kalleklev, CEO of Avance Gas (Oslo: AGAS), during a conference call Tuesday.
“Today, there are about 50 VLGCs taking a route via the Cape of Good Hope to the U.S. This summer, the number was 10,” said Kalleklev.
Impact on container shipping
Ship-position data also shows a growing variety of container ships in Panama Canal queues: 21 on Wednesday, around double the number at anchorage this summer. (This also includes container ships waiting to berth at Panamanian terminals, to not transit the canal.)
Neopanamax container ships that serve U.S. East and Gulf Coast ports secure transit reservations for his or her scheduled liner services. Nonetheless, the reduction in day by day Neopanamax reservation slots to simply five per day as of Jan. 1 will likely force some carriers to hunt alternate routes.
French carrier CMA CGM confirmed on Nov. 1 that the canal situation is already “taking a severe toll on operations.” MSC, the world’s largest ocean carrier, said Monday that the Panama Canal situation is having “a direct impact” its operational costs.
Industry analytics provider Linerlytica warned on Monday: “The Panama Canal transit restrictions have began to impact container ships for the primary time, with a rising variety of ships facing delays which might be set to worsen over the following two months.”
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